Order Passed By Emergency Arbitrator Under DIAC Rules 2023 Can Only Remain In Operation For 90 Days: Delhi High Court

The Bench of Justice Purushaindra Kumar Kaurav, hearing the appeal filed by the Municipal Corporation of Delhi (“MCD”), took note of the fact that the parties had not agreed to include the Emergency Arbitrator as a part of the Arbitral Tribunal. The Bench observed that the Emergency Arbitrator cannot be considered as the 'Arbitral Tribunal' to exercise the power vested under Rule 14.13 of the Rules of 2023.

It was the Petitioner's case that the Emergency Arbitrator erred in extending the operation of the impugned Award beyond the period of 90 days. Vide Rule 14.13 of the Rules of 2023, only the Arbitral Tribunal is empowered to extend the operation of the Award passed in an emergency arbitration proceedings.

It was the Respondent's case that such a narrow reading of the Rules of 2023 is impermissible, as the Emergency Arbitrator is empowered to modify and even extend the period of the Award's operation beyond 90 days. Rule 14.13 of the Rules of 2023 does not suggest that the interim order cannot be in operation beyond the period of 90 days. Furthermore, the definition of 'Arbitral Tribunal' under Rule 2(c) of the Rules of 2023 encompasses 'Emergency Arbitrator' within its scope. Therefore, since the Arbitral Tribunal is empowered to extend the operation of the emergency award, the Emergency Arbitrator is also vested with the same power.

The Bench observed that:

“Merely because power is conferred to the Arbitral Tribunal for modification, substitution, vacation, or extension of the order of the Emergency Arbitrator, the same cannot be extended to the latter. If the powers which are essentially conferred to the Arbitral Tribunal are allowed to be read into the powers of the Emergency Arbitrator, the entire scheme and object of emergency arbitration under the A&C Act will be defeated…”

The Bench thereafter observed that the only plausible view that can be taken without doing injustice to the scheme of the A&C Act is that the terms 'Emergency Arbitrator' and 'Arbitral Tribunal' cannot be used interchangeably. In the above terms, the Bench held that the Award passed by an Emergency Arbitrator can remain in force only for a period of 90 days. Thereafter, the Bench set aside the impugned Award.